While making a purchase decision using marginal thinking, a buyer should buy the good that yields the:
A) highest marginal benefit per dollar spent.
B) lowest marginal benefit per dollar spent.
C) highest average benefit plus marginal benefit per dollar spent.
D) lowest average benefit plus marginal benefit per dollar spent.
A
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The sacrifices made by societies in order to engage in military spending represent
A) the real costs of military spending. B) the excessive costs of military spending. C) the nominal costs of military spending. D) the opportunity costs of military spending.
Symmetry of net substitution effects is one of the principal conclusions of the theory of utility maximization. Which two mathematical theorems are used to prove this symmetry?
a. Taylor's Theorem and Fundamental Theorem of Calculus b. Cauchy's Theorem and DeMoivre's Theorem c. Lagrangian Theorem and Fundamental Theorem of Calculus d. Envelope Theorem and Young's Theorem
Thinking about the total utility gained from the consumption of a typical good, we can say in general that:
A. total utility will rise, peak, and then decline as more and more units are consumed. B. consuming more and more units of a good will eventually cause marginal utility to increase C. total utility increases by decreasing amounts, until it is maximized. Then it declines. D. total utility is maximized where the marginal utility is greatest.